Chi-quito

The owner of Frankie & Benny’s and Mexican chain Chiquito (amongst others) has announced they are to close 33 underperforming stores. Following the change in CEO a few weeks ago it seems the overhaul in operations has begun. The Group’s share price has almost halved in two years saw a 3.9% slide in first half sales as well as a pre tax loss of £22.5m compared to a profit of £38m in the same period last year. Their strategy review identified weak performance at Frankie & Benny’s had been more down to their own wrong doings rather than increased competition. Shares finished the day 3.58% higher.

Japanese inflation has fallen for a fifth consecutive month during July, adding more pressure to ‘Super Abe’. The data was worse than estimates had suggested and marked the biggest annual drop in more than 3 years. The CPI which excludes food prices declined 0.5% and the Nikkei closed the week 1.18% lower.

The morning session was dominated by low volumes as investors were happy to wait for Yellen’s comments. Asian trading was subdued as was America’s yesterday, and European markets generally slipped at the open. UK GDP revisions for Q2 were released and had potential to stir things slightly but as expected there were no revisions and this meant GDP growth in Q2 remained at 0.6%, with year over year growth of 2.2% in the three months ended June. Business investment unexpectedly rose by a seasonally adjusted 0.5% compared to a forecasted drop of 0.8%. The data did little in the way of change on the indices around Europe, the pound remained stronger (as it started the day) and the FTSE sat around flat.

Much anticipation had been built to this afternoon with Fed chair Janet Yellen speaking. In the brief period before she began at the Jackson Hole Symposium American stocks traded without her direction and immediately rose higher and this helped drag European stocks marginally higher, the FTSE was lifted just above the flat line. Enter Yellen, the main highlight was that the case for raising US interest rates has strengthened. The reaction initially was knee jerk and bonds along with equities were sold, only for this to be quickly reversed and at the close the FTSE finished 0.31% higher. At the time of writing US stocks were also higher, the Dow up 0.11% and the S&P 500 up 0.23%.